Drop shipping is increasingly becoming a popular way of selling online, as it is easiest, most cost effective and the smartest online business approach. If you are still not aware of what actually drop shipping is, let me introduce you to a process whereby your customers place an order on your web store, and the shipment is sent to them directly from a third-party supplier’s warehouse, without an intermediary step of storing the goods at your physical business location.
Normally, your business had to maintain inventory on hand; when the customer places an order, you get the packaging done and ship them to the customer. When a drop shipper is involved, the process looks a bit different and in fact it makes things ten times easier for you. A customer orders products from your website, you pass the order information to the drop shipper who packages the goods and ships them directly to the customer.
What are the benefits of drop shipping?
One of the biggest benefits of drop shipping is that you can launch a big store without having to invest tens of thousands of dollars. But that’s not just all about drop shipping, and here are more reasons to consider drop shipping business model for your ecommerce startup.
1- As drop shipping eradicates the need to keep inventory on hand, your business can save a lot of time, labor, and overhead costs of keeping your goods (maintaining a warehouse to store goods).
2- It allows you to offer items that would normally be impossible to ship, may be due to location or inability to store goods, like particularly large or perishable goods.
3- You can offer a better price than your competitors. Because drop shippers are often large businesses dealing with many orders a day, they can offer you rates that are lower than the ones your small or medium business can get otherwise.
4- Drop shipping also decreases the losses from damaged product, as the shipments take a more direct route from warehouse to customer.
5- Since your drop shipper takes care of the entire packaging and shipping, it prevents you from all logistical headaches and customer service distresses.
6- You don’t have to worry about overstock or shortages.
7- It eliminates the risk of changing trends that may cause certain products to suddenly fall in or out.
8- Expanding your business is easier with drop shipping, you do not need to invest any huge amount, but still you can expand your store.
So, How Do I Get Started and Start My Online Store?
So you’re sold on the idea of drop shipping, but you don’t really know where to start! This article will guide you through a step by step process to establish your drop shipping based ecommerce store and here it goes:
Step 1: Finding a Profitable Niche:
This is most important step; you must know what people are looking for and offer them with a variety of options. Clothing and accessories is one of the least risky business yet it is high in demand, as long as you offer high quality products. Selling pop culture merchandise through drop shipping can be a lucrative business opportunity; you may start an online culture merchandise store or use such products to increase sales, as these are the products loved by almost everyone.
Thankfully, you don’t need to spend time in obtaining license for pop culture products anymore, as you can find and sell new licensed products of movies, games, comics, and more using MXED. You can start selling merchandise of your choice immediately by adding products in to your Shopify store. The orders are shipped directly to your customers without having you involved in tedious packaging and shipping process. All you need to focus on is to drive targeted traffic to your store.
No matter, what core product line you have, pop culture merchandise can just make your online store more appealing. MXED has licensed products of DC Comics, Harry Potter, Pokemon, StarWars, Crunchy Roll, Warner Brothers, Marvel, Disney, Nickelodeon, Nintendo, Call of Duty, Capcom, Halo, Fallout, Rick & Morty and more. You can create a really big ecommerce store that sells awesome new collection of bags, tees dresses, footwear, headwear & accessories for almost all age groups, and interests without spending a penny in inventory and storage costs.
MXED can best be summarized as:
- Officially licensed Products – Now Shopify stores can sell StarWars products
- US Based Suppliers
- Shipping in 3 Business days
Step 2: Fulfilling the Legal Requirements:
If you are a US based entrepreneur, you must know that you need to get a sales tax ID in order to operate a business. Some of the US states including Alaska, Delaware, Montana, New Hampshire and Oregon do not require sales tax IDs, but others do. So, make sure to obtain your sales tax ID from local office you your state’s department of taxation.
Applying for a tax ID is easy and doesn’t cost much; and you can do it either by visiting your local county clerk’s office or online. For example, if you are based in New York, you can find details on New York State Department of Taxation and Finance Website.
Please, note that in order to get a sales tax ID, you may require a business entity (company/sole proprietor) and have a Federal Tax ID number (EIN). You can find complete details about EIN and how to apply online here at IRS website.
Step 3: Setup Your Online Store:
Setting up an online store is easier than you can think of. You literally do not need to have coding knowledge. There are lot of ready to use ecommerce platforms and Shopify is one of the best. You can build your brand online with you own .com through Shopify in minutes. Hundreds of awesome store templates are available to choose from and you can create a desired look and feel for your store without spending thousands on design and development costs.
Moreover, there are a lot of apps that can help you build a big store without spending a penny on inventory management and overhead costs. For instance you can quickly and easily start drop shipping with Shopify by integrating MXED app and automate your accounts using Intuit QuickBooks Online. Furthermore, there are a lot more free apps available for Shopify with which you can build a high end online store with minimum effort.
Step 4: Start Promoting Your Store
The purpose of all the efforts we discussed in earlier steps cannot be achieved without effective promotion of your ecommerce store. The benefit of using Shopify is that you have a great deal of free apps there using which you can promote your products effortlessly. But, you should not just rely on Shopify apps, and must explore every option that can help you grow sales revenues. Here is a list of free marketing options that every startup must use. Moreover, you should take time to study the customer behavior and align your social media, SEO, PPC and email marketing campaigns accordingly.
Remember, that store promotion is an ongoing process, and there’s always a room for improvements. And you must also have a sustainable growth plan ready; as you see your store starts growing you should have everything ready to take it to the next level.
The Bottom Line:
You can start an online store that has $Million worth of products in less than $1000 cash in hand through drop shipping, and it can grow bigger and bigger. But, like any other business, your online store will also have to face a lot of challenges and you must be ready to face them all!